How Nehru sowed the seeds for the abolition of Fundamental Right to Property

Late Nani Palkhivala, eminent jurist and outstanding senior advocate of the Supreme Court, has highlighted that right to property has been recognised in all democracies. It also appears in the Magna Carta (1215) and the French Declaration of the Rights of Man (1789). Article 5 of the United States Bill of Rights (1791) lays down that no person shall be deprived of property "without due process of law", "nor shall private property be taken for public use without just compensation". Similar provisions obtain in the Constitutions of Australia, Japan, Venezuela, Nigeria, the Basic Law of Germany and so on. Section 299 of the GOI Act, 1935, secured the right to property and contained a safeguard against expropriation without compensation and against acquisition for non-public purposes.

Palkhivala has underlined that the debates in the Constituent Assembly, when the draft articles corresponding to Article 19 (1) (f) and Article 31 came up for discussion, clearly showed that the framers of the Constitution attached sufficient importance to property to incorporate it in the chapter on Fundamental Rights. The Constituent Assembly did not agree to the suggestion to shift this article to a separate part as was done in the case of the provision regarding freedom of trade and intercourse. Like Seervai and others, Palkhivala, too, has emphasised that right to property is necessary for the meaningful exercise of other Fundamental Rights. (Palkhivala 1974; pp.35-8)

However, Nehru's concept of the Right to Property was not in consonance with the prevailing Western democratic thought. He believed and repeatedly expressed that "outright expropriation of land could not be considered wrong as there was no moral right attached to property". (Kashyap 1986; p 56)

By his letter dated October 9, 1954 addressed to chief ministers, Nehru had invited their attention to the recent decisions of the Supreme Court by which the court had held that if state action withheld any property from the possession and enjoyment of the owner or materially reduced its value, the abridgement of the owner's rights would amount to deprivation, and in every such case the law must provide for compensation to the owner. The court had also given a very wide meaning to the expression "property" so as to include contractual rights. In consequence, the curtailment of every property right will have to be compensated under the law. The court had further held that the principles for determining compensation as laid down by the legislature must ensure a just equivalent of what the owner has been deprived of, and that the question whether those principles take into account all the elements which make up the true value of the property is a issue. Nehru had written: "When clauses (1) and (2) of Article 31 were being considered and passed by the Constituent Assembly, we certainly did not think that they would be interpreted in this manner by justiciable the courts. However that may be, this very liberal construction of the Article creates serious difficulties in the way of our putting through social welfare legislation on the lines we have in hand." To get over this difficulty, Nehru had suggested amplification of Article 31A and not to alter the provisions of Article 31 in any way.

"Property" became a dirty word in Nehru's concept of the socialistic pattern of society. Nehru was not a believer in an individual's right to hold property. In fact, he had opposed the inclusion of the Right to Property as a Fundamental Right. I have earlier discussed the First Amendment made in 1951 by which the highly despicable Ninth Schedule was introduced. The Fourth Amendment of the Constitution effected in 1955 had a two-fold objective. First - to restrict the liability to pay compensation in cases of acquisition of property by the state; and, second - to make the legislature the final arbiter of the quantum of compensation. By the Constitution (Fourth Amendment) Act, 1955, the words "no such law shall be called in question in any court on the ground that the compensation provided by that law is not adequate" were added to clause (2) of Article 31. A new clause 2-A was also added to that article which read as follows: "Where a law does not provide for the transfer of ownership or right to possession of any property to the state or a corporation-owned or controlled by the state, it shall not be deemed to provide for the compulsory acquisition or requisitioning of property, notwithstanding that it deprives any person of his property." (Sathe 1989; p 12) This was clearly and blatantly inequitable from the landholder's point of view, but was fully in keeping with Nehru's concept of socialism.

The Constitution (Fourth Amendment) Bill was introduced on December 20, 1954, was passed by the Lok Sabha on April 12 and received the president's assent on April 27, 1955. The Fourth Amendment made the adequacy of compensation non-justiciable. The objects and reasons of the Amendment stated:

Recent decisions of the Supreme Court have given a very wide meaning to clauses (1) and (2) of Article 31. Despite the difference in the wording of the two clauses, they are regarded as dealing with the same subject. The deprivation of property referred to in clause (1) is to be construed in the widest sense as including any curtailment of the right to property. Even where it is caused by a purely regulatory provision of law and is not accompanied by an acquisition or taking possession of that or any other property right by the state, the law, in order to be valid according to these decisions, has to provide for compensation under clause (2) of the Article. It is considered necessary, therefore, to restate more precisely the state's power of compulsory acquisition and requisitioning of private property and distinguish it from cases where the operation of regulatory or prohibitory laws of the state results in "deprivation of property". (Kashyap 2004; pp 23-4)

It can thus be seen that the purpose of the legislation was to avoid paying compensation, wherever possible.

The 25th Amendment went a step further and substituted the word "amount" for the word compensation. By the 44th Amendment, moved by the Janata government after the Emergency, the Right to Property was removed from Part III of the Constitution relating to Fundamental Rights in 1979. Thereafter it has become only a legal right.

Seervai has argued that the unity of India is most effectively secured by Article 19 (1) (d), (e), (f) and (g), which conferred on the citizens the right to move freely throughout the territory of India; to reside and settle in any part of India; to acquire, hold and dispose of property in India and to practise any profession, or carry on any occupation, trade or business in India. That unity was also reinforced by other fundamental rights. Article 19 (1) (f) which conferred on citizens the right to acquire, hold and dispose of property formed part of a group of articles under the heading "Right to Freedom". It requires no elaborate argument to demonstrate that property is intimately connected with the Right to Freedom. (Seervai 2011; p 1358) Seervai has argued that the Fundamental Right to the Freedom of Speech and Expression (which includes the freedom of the press and the other media of communication, the freedom of association, the freedom to move freely throughout the territory of India, to settle in any part of India, to carry on business, profession or vocation in any part of India would be destroyed if the Right to Property was not a guaranteed Fundamental Right and if the obligation to pay compensation for private property, acquired for a public purpose, was not provided for. Similarly, the right to freely practise religion requires the establishment of religious and at times, educational and charitable institutions... It requires no elaborate argument to show that the Right to Freedom of religion would be destroyed if a temple, mosque or church was acquired for a grossly inadequate compensation… It would be fanciful to believe that a statute can protect property. Property can no more be protected by a statute than water can be carried in a sieve. In the result, the framers of the Constitution were right to include property under Fundamental Rights, for it is intimately connected with other most valued fundamental rights, and because property is necessary for citizens to maintain themselves and their families… (Seervai 1978; pp.150-1)

Atul M Setalvad, in the article titled "India's Higher Judiciary: Some Significant Failures", has stressed that:

The right to hold property is universally recognised (for example, the Universal Declaration of Human Rights), and many other Fundamental Rights which are not curtailed so far cannot be effectively enjoyed without this right. It would be difficult for the village shopkeeper to carry on his business without owning some property… Many scholars are of the view that freedom is itself in jeopardy if the Right to Property is not protected by the state. One can only hope, now that socialism is out of fashion throughout the world, that the Supreme Court of India will reconsider its rulings on the subject… The very flexibility introduced in Kesavananda, while undesirable in principle, gives the opportunity for a future Bench to alter the position of, say, the right to property. (Iyer 2001; p 79)

While the citizen of India has no right whatever to hold property and his property can be taken away by the legislature without any restraint, a foreign investor has all the protection of his investment under the bilateral and multilateral agreements entered into by India. The property of a foreign investor cannot be acquired or expropriated without full compensation. If aggrieved, the foreign investor can ask for relief from an international board of arbitrators or international court of justice. After the onset of economic reforms and globalisation, India has entered into such agreements with all concerned countries. Against this background, it will be invidious to deny to an Indian citizen the right which is available to a foreign investor. It is therefore imperative that the Constitution is amended to reinstate the Right to Property as a Fundamental Right.

(Reprinted with the publisher's permission)